Stock mutual funds?

My husband recently found out that his grandma put money into stock mutual funds for him, and I was wondering exactly what they are, how you access them, and if there was any better way to get a return on our money? Our bank seems big on money market accounts...are they good? Are they better? Is there another option I dont know about yet?
Any details would be wonderful, thank you.
Also, if the customer name is his dad, but his name is on it, will we need his dad to get the money?

It's all about risk vs. potential reward. Money market accounts are low risk and low reward.

There are all kinds of mutual funds: some are very high risk with the potential for both high rewards and high losses. Other mutual funds are very conservative. In the long run, and on average (important qualifiers!), stocks (whether in a mutual fund or held individually) have given better returns than bonds, savings accounts or money market accounts. But investing in mutual funds is just like investing in the stock market: you have to know what you're doing or you can lose your shirt. I recommend reading some good books to educate yourself before making any decisions. There's no substitute for a good financial education, since financial advisors can rip you off too, even with a wall full of degrees and certificates. See my Amazon list of investing books:

http://www.amazon.com/ONLY-THE-BEST-Stoc...

As to accessing the funds, you'll have to talk to your dad and grandma or the mutual fund company. It's possible that the funds are in a trust account and you don't have the freedom to withdraw or make investment choices.

Absolutely great question!
Let's treat this inheritance as cash and not mutual funds for this discussion. You need to provide us with lots more information about yourselves in order for us to give you appropriate advice. You goals and aspirations for this money will need to surface as well. My suggestion for you would be to speak to a seasoned investment professional (not a bank) who could then make appropriate recommendations for your inheritance. An advisor will cost a few bucks but it is a small price to pay to prevent you from 'MAKING THE BIG MISTAKE'!

As far as your father-in-law being the owner of these mutual funds. There are a couple of considerations to keep in mind here. If there is to be a liquidation your father-in-law may be liable for some taxes on the profits. You might consider adding your husbands name as a joint owner and also change the SS# on the account to your husband. This would relieve your father-in-law of any tax liability if a sale should occur. I would talk to your accountant about this.

A mutual fund is technically a company that purchases securities, like stocks or bonds. As a mutual fund shareholder, you own a share in that company. As the stocks a fund owns appreciate in value, your mutual fund shares also appreciate in value at the same proportionate rate. When those stocks within the fund pay dividends, the fund manager passes these dividends on to the mutual fund shareholders. You may purchase more shares or sell shares on any given day the market is open. Chapter 17 (page 143) of my free downloadable book at http://www.invest-for-retirement.com gives a full explanation of mutual funds that any beginner can understand.

Just so you know, a money market account is a mutual fund that purchases short-term, high-quality bonds. Your bank, though, does not offer a true money market account ... instead, it offers a Money Market Deposit account which is (in my opinion) for suckers only. Banks love to advertise their Money Market Deposit accounts because it makes them a lot of money. They can skim off whatever amount they want to keep and send the rest to you. Because they are not regulated by the FCC, a bank does not need to disclose to you their hidden fees in a money market deposit account. As I say in my book, "Most investment sold by your local bank are a sucker's bet because of high costs." See pages 99 - 101 of my book for an explanation of money market accounts.